Sajo Industries, 2/133 Maikkadu Vs. the Regional Director - Court Judgment

Excerpt:
[a.s.pachhapure j.] this writ petition is filed u/articles 226 and 227 of the constitution of india praying to quash the impugned order dated 28.36.2010 passed by the respondent no.4, the special deputy commissioner, bangalore district, vide annexure-k.order m.n. krishnan, j. ........................................... ins.a.no.40 of 2010 ............................................. dated this the 4th day of november, 2010. j u d g m e n t this is an appeal preferred against the judgment of the employees' insurance court, alappuzha in i.c.no.17/2007. the trial court on a consideration of the materials had dismissed the application and held that the establishment sajo industries is covered under the provisions of the employees' state insurance act. it is against that decision, the applicant has come forward with this appeal. following four questions were formulated as the substantial questions of law involved in the appeal. (i) whether the employees' insurance court was legally correct in entering a finding that the applicant establishment is covered under the e.s.i act. (ii) whether the court below right in entering a finding that employees supplied by m/s. king beverages can be treated as employees under section 2(9) of the e.s.i act. (iii) whether the court below right in holding that the two security guards could be treated as employees of the applicant unit especially when m/s. while guards security force is a covered establishment under the e.s.i. act and the two employees are insured employees. (iv) whether the court below right in entering a find that the applicant unit and kings beverages could be clubbed together and treated as a unitary establishment. the crux of the issue is as follows: 2. the appellant is running an establishment wherein drinking mineral water is made and supplied. according to the claimant, he is only having 7 workers in his premises as his workers and therefore provisions of the e.s.i act cannot be extended to that establishment. 3. on the contra the employees state insurance corporation would contend that there are two security guards and three more workers permanently working in the premises of sajo industries and therefore the establishment is liable to be covered and there is no mistake committed by the employees' insurance court in upholding the coverage. 4. the learned counsel for the appellant would submit before me that it is by virtue of an agreement entered into between the kings beverages and the applicant establishment mineral water is being produced, packed and sold. ext.p3 is the agreement. it is entered into between the kings beverages and the sajo industries. the first party is the kings beverages and the second party is the appellant. by virtue of the said agreement, the first party has undertaken to deliver the materials as well as to arrange and unload those materials in the premises of the second party. the important clause therein is the first party shall supply sufficient number of labourers in the plant belonging to the second party for filling, packing, loading and forwarding of packed drinking water. so there is an unequivocal agreement entered into between the parties whereby the kings beverages had promised to supply workers for the said purpose. 5. the employees state insurance corporation's contention is that three such workers are working in the premises of sajo industries and therefore when it is added upon, the number of 10 is reached and so the establishment is covered. unlike a principal employer and an immediate employer the thing is different in this case by virtue of the specific agreement entered into between the parties. the two establishments namely kings beverages and sajo industries are remaining independent. they are on a joint venture in the manufacturing of water. in the said process they entered into an agreement whereby one party undertakes to supply the materials, unload them and also supply some workers for carrying out the work. the other party has undertaken to do the rest and pack it and dispose it of for the purpose of sale. so it is keeping their separate identity, parties had entered into an agreement and therefore the employer employee relationship between the sajo industries and the persons deputed from the kings beverages are not there. it is true that they are working in a place where the process is going on. it has also to be stated that there is no dispute that the wages for these labourers are paid by the kings beverages and not by sajo industries. these three workers also do not come within the muster roll or any other document maintained by the appellant establishment. on the other hand they are part and parcel of the kings beverages and as per the direction of their owner they come and do the work in the premises of sajo industries. therefore i am afraid that just because these peoples are carrying out the work in the premises of sajo industries, they must be construed or considered to be the workers of sajo industries. when on facts one can find that these three workers are having independent existence by virtue of their employment, i am not inclined to accept the contention that they shall be treated as employees of sajo industries for the purpose of arriving at the question regarding coverage under the employees state insurance act. 6. then i had bestowed my attention to the question of clubbing. first of all neither the applicant nor the employees state insurance corporation's contention throw much attention to the question of clubbing these two industries. these two industries are independently owned and managed industries. they manufacture different items. one does not have financial dependency on the other . there is no inter transferability and even there is no geographical proximity and so taking into consideration of all these facts together the question of clubbing also cannot arise for consideration. it is true that the employees insurance court provisions are to be interpreted which is beneficial to the worker. but at the same time when materials established to show that it cannot be so interpreted, so the court cannot held it otherwise. so from the materials available, i hold that even if the security workers are taken into consideration as part and parcel of this sajo industries, it will be only amounting to 9 and therefore when 3 are excluded, the establishment cannot be covered. 7. therefore i disagree with the finding of the e.i court and set aside its order and hold that sajo industries is not liable to be covered under the employees' state insurance act. the appeal is thus allowed and disposed of accordingly.

Judgment:
ORDER

M.N. KRISHNAN, J.

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Ins.A.NO.40 OF 2010

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Dated this the 4th day of November, 2010.

J U D G M E N T

This is an appeal preferred against the judgment of the Employees' Insurance Court, Alappuzha in I.C.No.17/2007. The trial court on a consideration of the materials had dismissed the application and held that the Establishment Sajo Industries is covered under the provisions of the Employees' State Insurance Act. It is against that decision, the applicant has come forward with this appeal. Following four questions were formulated as the substantial questions of law involved in the appeal.

(i) Whether the Employees' Insurance Court was legally correct in entering a finding that the applicant establishment is covered under the E.S.I Act.

(ii) Whether the court below right in entering a finding that employees supplied by M/s. King Beverages can be treated as employees under Section 2(9) of the E.S.I Act.

(iii) Whether the court below right in holding that the two security guards could be treated as employees of the applicant unit especially when M/s. While Guards Security Force is a covered establishment under the E.S.I. Act and the two employees are insured employees.

(iv) Whether the court below right in entering a find that the applicant unit and Kings Beverages could be clubbed together and treated as a unitary establishment.

The crux of the issue is as follows:

2. The appellant is running an establishment wherein drinking mineral water is made and supplied. According to the claimant, he is only having 7 workers in his premises as his workers and therefore provisions of the E.S.I Act cannot be extended to that establishment.

3. On the contra the Employees State Insurance Corporation would contend that there are two security guards and three more workers permanently working in the premises of Sajo Industries and therefore the establishment is liable to be covered and there is no mistake committed by the Employees' Insurance Court in upholding the coverage.

4. The learned counsel for the appellant would submit before me that it is by virtue of an agreement entered into between the Kings Beverages and the applicant establishment mineral water is being produced, packed and sold. Ext.P3 is the agreement. It is entered into between the Kings Beverages and the Sajo Industries. The first party is the Kings Beverages and the second party is the appellant. By virtue of the said agreement, the first party has undertaken to deliver the materials as well as to arrange and unload those materials in the premises of the second party. The important clause therein is the first party shall supply sufficient number of labourers in the plant belonging to the second party for filling, packing, loading and forwarding of packed drinking water. So there is an unequivocal agreement entered into between the parties whereby the Kings Beverages had promised to supply workers for the said purpose.

5. The Employees State Insurance Corporation's contention is that three such workers are working in the premises of Sajo Industries and therefore when it is added upon, the number of 10 is reached and so the establishment is covered. Unlike a principal employer and an immediate employer the thing is different in this case by virtue of the specific agreement entered into between the parties. The two establishments namely Kings Beverages and Sajo Industries are remaining independent. They are on a joint venture in the manufacturing of water. In the said process they entered into an agreement whereby one party undertakes to supply the materials, unload them and also supply some workers for carrying out the work. The other party has undertaken to do the rest and pack it and dispose it of for the purpose of sale. So it is keeping their separate identity, parties had entered into an agreement and therefore the employer employee relationship between the Sajo Industries and the persons deputed from the Kings Beverages are not there. It is true that they are working in a place where the process is going on. It has also to be stated that there is no dispute that the wages for these labourers are paid by the Kings Beverages and not by Sajo Industries. These three workers also do not come within the muster roll or any other document maintained by the appellant establishment. On the other hand they are part and parcel of the Kings Beverages and as per the direction of their owner they come and do the work in the premises of Sajo Industries. Therefore I am afraid that just because these peoples are carrying out the work in the premises of Sajo Industries, they must be construed or considered to be the workers of Sajo Industries. When on facts one can find that these three workers are having independent existence by virtue of their employment, I am not inclined to accept the contention that they shall be treated as employees of Sajo Industries for the purpose of arriving at the question regarding coverage under the Employees State Insurance Act.

6. Then I had bestowed my attention to the question of clubbing. First of all neither the applicant nor the Employees State Insurance Corporation's contention throw much attention to the question of clubbing these two industries. These two industries are independently owned and managed industries. They manufacture different items. One does not have financial dependency on the other . There is no inter transferability and even there is no geographical proximity and so taking into consideration of all these facts together the question of clubbing also cannot arise for consideration. It is true that the Employees Insurance Court provisions are to be interpreted which is beneficial to the worker. But at the same time when materials established to show that it cannot be so interpreted, so the Court cannot held it otherwise. So from the materials available, I hold that even if the security workers are taken into consideration as part and parcel of this Sajo Industries, it will be only amounting to 9 and therefore when 3 are excluded, the establishment cannot be covered.

7. Therefore I disagree with the finding of the E.I Court and set aside its order and hold that Sajo Industries is not liable to be covered under the Employees' State Insurance Act.

The appeal is thus allowed and disposed of accordingly.